A perfect season
What makes the Four Seasons so special? Guests can check out anytime they like - but employees never want to leave.
(Fortune Magazine) -- The 15-foot pepper tree in front of my house collapsed yesterday, uprooted by a massive winter storm, and came crashing down against a utility pole. Today my wife is dealing with the fire department, a puddle in the basement, an arborist, our 1-year-old son, another round of storms, and a hound dog that refuses to poop in the rain. Twenty-five hundred miles away, I'm lying face-down in a thatch hut at the Four Seasons resort along Maui's Wailea beach. Two native Hawaiian women ply their forearms on my backside in a ceremonial Lomi Lomi massage, working the knotted muscles above my shoulder blades and along my spine. "E ho mai ka 'ike mai luna mai e," they chant rhythmically, calling on the spirits for wisdom and to help coerce toxins from my system. Just outside the door, children run barefoot at the edge of the Pacific Ocean. Handsome sunbathers flip through Michael Crichton novels before nodding off under sailcloth cabanas. Humpback whales breach at the horizon.
Many of the guests are paying thousands of dollars a night to be part of this scene. Four Seasons executives like to think of it as home away from home. But that doesn't do it justice. People come to Maui to escape the realities of everyday life, like leaky basements and constipated pets. And those who check into a Four Seasons pay a lot of money for one thing above all else, to be treated like a VIP.
Many are in fact VIPs. Arnold Schwarzenegger frequents this resort. Michael Dell owns the place. Cuba Gooding Jr. and Wolfgang Puck are walking the grounds at this very moment. Other Four Seasons properties have hosted the Clintons, the Bushes (W. and H.W.), as well as many international heads of state and captains of industry. But every Four Seasons guest is a somebody, even the couple that saved for a year to spend three nights in a garden-view room. The chain has built a reputation on consistent high-touch, carefully crafted service for all. Other exclusive resorts pamper their guests, but Four Seasons offers a subtler brand of doting: helpful rather than subservient; instinctive rather than programmed.
So it's easy to understand why Four Seasons has a cultlike clientele. One Maui guest told a manager, "If there's a heaven, I hope it's run by Four Seasons." What's less obvious is why the staff seems so enamored with their roles. The yearly turnover for full-time employees is around 18%, which is half the industry average. And at some locations, like Bali, it's as low as 3%. The company has been included in our Best Companies to Work For every year since the list's inception in 1998. Every last one of the 35,000 or so employees, it seems, professes to love their employer.
How can the servants be as happy as the master? Unfortunately, no amount of chanting in paradise will get to the heart of such a lofty question. Finding the answer requires a trip to, of all places, Toronto.
If you've ever washed your hair on a business trip, you have Isadore Sharp to thank. Before the Four Seasons founder, chairman, and CEO put shampoo into rooms at his first property, the swanky (for its time) Four Seasons Motor Hotel in downtown Toronto, all hotel guests provided their own suds. That was 1961. "I realized if we could replace the conveniences of your home and office, that would be a very valuable thing," says Sharp, a fit 76-year-old, smartly dressed in a black bespoke suit and sparkling tie, at corporate headquarters across town from his original property. Guests loved the amenity, and the competition quickly followed suit. Other Four Seasons innovations have been aped over the years, like the pillow-top bed. But, Sharp insists, no one has replicated the very thing that Four Seasons stands for. "Personal service is not something you can dictate as a policy. It comes from the culture," he says. "How you treat your employees is how you expect them to treat the customer."
All new hires complete a three-month training regimen that involves improvisation exercises to help anticipate guest behavior. But Sharp contends that the most important guideline is the ethical credo known as the golden rule: Do unto others .... "That's not a gimmick," Sharp says. "In the hiring process, we're looking for people who are very comfortable with this idea."
Hiring is definitely on Sharp's mind. He expects to double the number of Four Seasons locations within a decade, and this year alone will open properties in Bora Bora, Florence, Istanbul, Macau, Mauritius, Mumbai, and St. Louis. Such ambitious growth is possible because the company has some very wealthy new owners: Bill Gates and Saudi Prince Al-Waleed bin Talal took the company private in 2006, buying it for $3.7 billion, or about $90 a share. That was a rich valuation, considering that shares were in the 40s a few years ago. "Unfortunately, the stock market penalizes some ideas. We took the company private to grow more aggressively, to boost the portfolio with more hotels. We're expanding into areas that we could not get into if we remained public," says Prince Al-Waleed, who acknowledges the challenge of maintaining the quality of service during such growth. One of the keys is hiring the right people. "The strength of Four Seasons," he says, "is consistency."
Sharp doesn't have to come up with a ton of upfront cash to drive the expansion: Like most hotel chains, Four Seasons doesn't own its real estate. People like Michael Dell, David Murdock, and Ty Warner own the buildings; Four Seasons runs the facilities and receives a management fee of about 3% of revenue, plus various incentive fees. But he will need 35,000 new employees.
Every applicant, whether hoping to fold laundry or teach yoga, goes through at least four interviews, including one with the general manager. HR interviews a high percentage of applicants because it's less concerned with experience (which you can see on a résumé) than with a positive, helpful outlook, which comes across only in person. "I can teach anyone to be a waiter," says Sharp. "But you can't change an ingrained poor attitude. We look for people who say, 'I'd be proud to be a doorman.'" By now the word is out that Sharp treats his people well. The Doha, Qatar, hotel received 25,000 applications for about 600 positions before it opened in 2006.
For management positions, the company recruits from top programs like those of Cornell University and the University of Nevada at Las Vegas. It closely monitors room rates and pay scale at the competition. The goal is to charge the most per room in a given market and pay salaries between the 75th and 90th percentile - the magic ratio, executives say, to attract the right people and maximize profits. The company automatically contributes 3% of an employee's salary to a 401(k) and another 3% to 5% in profit sharing. (Four Seasons has met profit-sharing goals for the past decade, except for 2001, when the entire travel industry slumped.)
For the management trainee with a yen for travel, Four Seasons offers the world. A recent grad will likely start as an assistant manager making in the low to middle 40s. It's not a killer paycheck, but the company promotes heavily from within. An ambitious employee can reach the general manager level in, say, a dozen years. At that point he or she will clear $200,000 to $300,000. In some locations, GMs also get rooms, a driver, and private-school tuition for their kids. The company doesn't shun homebodies, but it definitely favors a bit of wanderlust. "Mobility in this business is a big plus, for sure," says Kathleen Taylor, the co-president and COO who oversees expansion efforts. "Our needs as an organization are truly global."
All employees - seamstresses, valets, the ski concierge, the GM - break bread together, free, in the hotel cafeteria. It may not have white linen or a wine list, but the food and camaraderie are good. Having a spacious dining room, staff showers, and locker rooms drives up operating costs, but Taylor considers it necessary. "You have to design a building that is operationally efficient to deliver superior service to the guest," she says. "But it also has to be an environment where the employees feel comfortable."
The killer perk for all employees is the free rooms. After six months, any staffer can stay three nights free per year at any Four Seasons hotel or resort. The number increases to six nights after a year and steadily thereafter. Employees book standard rooms but often get upgraded at check-in. While the benefit may cost a few thousand dollars a year per employee, the returns seem invaluable. "I've been to the one in Bali," says Kanoe Braun, a burly Maui pool attendant who has been at the resort for ten years and has recruited both his brother and his mother. "That was by far my favorite. You walk in, and they say, 'How are you, Mr. Braun?' and you say, 'Yeah, I'm somebody!'"
"You're never treated like just an employee. You're a guest," adds Michelle De Rochemont, a Maui waitress of 17 years. Her favorites are Beverly Hills and Vancouver. Her 10-year-old son has never slept in a hotel other than a Four Seasons. "You come back from those trips on fire. You want to do so much for the guest."
Of course, the service industry isn't for everyone. Being a hotel employee often means working when regular folks are lounging, so forget about weekends off or spending Christmas with the family. Then there are the guests who arrive with screaming children after delayed flights, not to mention belligerent S.O.B.s (sons of billionaires) who will bathe only in Evian. Anyone paying $1,000 a night expects to have his mind read. For Four Seasons employees, the training never stops. But usually they either have the instinct, or they don't. New hires, I'm told, either depart quickly or embrace the dynamic and stay for years.
Thomas Steinhauer is the charming GM and regional VP who runs all the Hawaiian Four Seasons. His charges revere him for the way he empowers them, listens to their ideas, disciplines without a grudge, and deflects credit. Steinhauer has seen many succeed and others fail during his 28-year tenure in the business, the last 13 with Four Seasons. "In this business, you have to have an adventurous streak," he says with a wisp of an Austrian accent. "You need to take pride in what you do, and you have to have a sense of compassion. And if you're judgmental, you're dead."
It's easy to sit back and be cynical about a group of people who smile all the time, profess to love their bosses, and skip to work every day. But the VIPs who peel off a lot of money at this hotel chain understand the genuine nature of the experience. Spending time among happy employees, seeing what they're seeing - people helping one another, along with the occasional humpback whale on the horizon - somehow chips away at negativity. The environment has an equally dramatic effect on the staff. They're happy because they're comfortable, well cared for, and safe. They feel they're with family. They feel as if they're home. Except without the leaky basement.